South Africa. Perceptions of the dark continent.

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mike6

Well-known member
Joined
Jan 26, 2015
Messages
65
Location
South Africa
Gentlemen,
your insight would be appreciated.
I am a micro refiner who resides in a third world country.90 percent of our population of some 50 million individuals live only slightly above the breadline. It stands to reason then, that the local market for the sale of my preferred precious metal, silver, is limited.The solution of course, would be to sell this commodity internationally, perhaps on a platform like Ebay. I expect that when I try this, my major barrier to successful sales to the northern United States, will be my location. Tales abound in the world of E-commerce, of African scams. How do I prove to prospective clients that I am to be trusted?. I am aware that I could sell to a large refinery, however, my premiums would be far less than selling to members of the public. My pricing is consistently 1 or 2 percent lower than the prices being asked on Ebay for hand poured bars of .999 purity. I currently have available 10 kg of fine available per month, in denominations of 1kg, 500g and 100g bars.

Please note, that I do not make this posting in an attempt to solicit business, but rather as an earnest appeal to members of first world countries to advise me on how to proceed in gaining the trust of your consumers. I include for your perusal, representative pictures of my bars.

Thank you.
 

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Mike, I don't have an answer to your actual question. In addition to scams, you might also face an uphill battle over other concerns of laundering, "blood" commodities, etc.

My reason for posting is to mention the fees charged on FeePayPal. Keep in mind that these will run well over 10%, typically 12% or better. Knowing that, would a refinery actually take that big a bite with the quantity and quality you're offering? It's easy to forget about those fees.

Dave
 
Find you a north american counterpart to work with to hold and ship you gold using an american address. You maintain the financial part and they handle the logistics Basically a drop shipper.
 
The logistics of importing any thing properly is daunting.
And Precious metals are even more fraught with complications.
Even transfers between the U.S. and U.K. of any quantity over what can be considered a gift has so much import duty and handling charges as to make the exercise virtually pointless.
Such transactions are all a form of currency transfer and government's have had a monopoly on the control of that for century's.
The economics mean that only substantial transfers are worth while and the licenses to do so are very well controlled so will need the help of a specialist export agent.
 
I must admit I think that instead of pouring many bars and then trying to sell them I would pour one or two large ones and strike a deal with a local buyer or refinery. If you can spend less time chasing sales and poring small bars you would have more time to increase your production and bigger quantities should realise a better percentage return:
 
nickvc said:
I must admit I think that instead of pouring many bars and then trying to sell them I would pour one or two large ones and strike a deal with a local buyer or refinery. If you can spend less time chasing sales and poring small bars you would have more time to increase your production and bigger quantities should realise a better percentage return:

I agree

Kurt
 
Gentlemen,

Thank you for your comments on my post, an eye opener, to say the least. The concern over "blood commodities" hadn't even crossed my mind. In the interim, I have researched further, the Ebay, Paypal and courier charges, and the prognosis does not look good,(confirmed 14.3% for Ebay and Paypal), and to my horror, to ship a 1kg parcel from South Africa to Atlanta, $184.00, by courier. The postal service locally, is not an option. (our postal service is actually 4th world), and I only use Fedex or DHL for my local deliveries, which, while more expensive than the post office, is not exorbitant, and also extremely reliable. I am too afraid to even look at the implications of import and export duties. In all, this model is dead in the water.

So what to do? Ralph, your suggestion has certainly gotten my synapses firing, but I think some tweaking of the model may be required. Consider this: An American/South African syndicate of like minded individuals, (an inter-continental alliance, if you will.) As refiners, we already carry a universal commodity, (in this case .999 silver). This is our first advantage. This eliminates the need for the commodity to cross our respective borders. This type of model is well illustrated by General Motors, who have a wholly owned subsidiary in Port Elizabeth, (a coastal city in South Africa.) manufacturing an extensive range of motor vehicles, for sale to South African consumers. If it can work for cars, why not for bars? I write this post on the fly, gentlemen, and there will be a host of details to be considered before a venture of this nature could be conceived, and it is in the spirit of debate, that I request your further considerations and comments.

Mike
 
Hope this helps.

I have not much experience with refining, but I do have 27 years experience in sales. Ebay, from what I have seen for now, is indeed a good forum for selling silver!!

Scrap sterling is going for well above spot and people are paying more for that than they can buy pure bars for from most any silver dealer. I don't get it but it is happening left and right.

I would try to increase my reputation in that forum. I would start with small sales..and I mean small. Grains, grams and ounces bring a premium. The object at first will be numbers of sales....create as many positive feedbacks as possible. Maintaining 100% positive feedback is key and my goal would be at least to get 150 under your belt. Once you establish that reputation, the sales are there. When they order, acknowledge the order, and let them know your shipping intentions. Walk them all the way through until delivery and then some. Positive feedback being the goal!!

I have found the fees can make a dent in your profit, but if you ship smart, and price accordingly, the potential is certainly there.

As I said I am new to refining. My goal is to simply recover some of the cost it takes to enjoy refining. I started selling five grains of silver at a time for 99 cents USD. It gets me about 90 dollars per ounce of silver for now. I did a "buy one get one" thing as well just to get more sales and increase feedback. My first day I had 35 orders.

I always send extra and let them know I did. The object being to get sales under my belt and develop my reputation on ebay. I do twice refine everything in electrolysis as my skills are still a bit weak. I want to try and be sure my product is as good as possible, but even with that being said, I am making out.

I know that if and when I buy silver on ebay....I look at the sellers feedback. I don't care of the country...that feedback is what a good seller will protect. If I was you, that is what I would do. From my limited experience, if done with some research, It is a very viable option with some time invested.

Hope that help you and good luck,
Craig
 
I know in the UK that eBay has set up a deal with a courier service that is reliable and reasonably priced it might pay you to check if a similar system is available to you in South Africa.
Personally I'd still ditch the idea and look for a local buyer with decent prices and increase your work output rather than spend hours sorting through small orders and pouring dozens of bars.
 
Gentlemen,
Thank you for your comments to date.I am fortunate, in that my situation does not require me to prioritize through put over sales, or vice versa. I have noticed, that in my local market, I am more likely to sell 100g bars to the public, than kilogram lots . Bearing in mind the market related premium that the public is prepared to pay, over any comparable offer I have received from the large refineries, the additional work required in pouring smaller bars is an acceptable trade off. Any fresh input would be appreciated, prior to me attending this thread's funeral.
 
I would be tempted to pour 3 ounce bars silver bars in the shape of crosses, or some African animal and have someone sell them to the tourist in the bigger city, for over spot.
 
Sir,
A fine proposition. I am not sure whether the American public is familiar with the African "Big five". These are the lion, leopard, elephant, buffalo and rhinoceros.I have been considering engraving a series of bars that depict these animals. I had not considered making these available at tourist centers.Thanks for the idea.
 
I know a guy who runs a cash for gold and he does his own refining. He also produces his own silver from a cell. He made small 5 ounce investment bars with his shops name on them and he sold very few. Then he got the idea to make a series with oil and gas rigs stamped on them to appeal to what most of the locals did for a living.

He was right, he told me he could not keep up with the stamped bars as the demand was high. At least it was when oil was $100 a barrel. But the combination of the investment value and the stamping of something the locals want worked for him. I think your idea of the African Big Five may have tourist appeal.
 
Late reply i know.

The average south african may not export un-denounced noble metals without proper legislation.

Not even a coin may be sent out of the country via any postage means, unless in person or verified as collectors status.

South africans may export scrap, on permit with tax clearance and a export permit, again if source is designated as clean.

Myself and a south african associate own small bussinesses, and the red tape involved makes it laughable, as south african gold and the "concept" the world has of it is flawed as best.

I appologise for not yet introducing myself formaly, but i prefer to read rather than talk. and this page here made quite the impression on me, south africa is not so "3rd world" as the author here made it appear, in retrospect it is very developed in the "white" area's and thousands of farms lining the spaces inbetween, i think south africa has in a good year more export in grain and meat then most other country's, being dutch my father imports meat globally, and exports, but south africa must not be underestimated.

unfortunatly, that coutry does factually sit on the largest untapped gold reserves globally, and i fear that they are not as "low class" as the steriotypical view portrays.
 
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